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tv   Squawk Box  CNBC  May 3, 2012 6:00am-9:00am EDT

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i'm andrew ross sorkin along with joe kernen and michelle caruso-cabrera. becky is on her way to omaha for this weekend's berkshire hathaway meeting. i'll joiner out there so ath. the ecb holding a policy setting me meeting. expected to resist calls to restart it bond buying ram. we'll have a live report from europe. and back in the u.s., weekly jobless claims top the economic economiceconomic calend calendar. also today, will is data on q1 productivity and ism nonmanufacturing. the nation's retailers also will start reporting april sales. dos compan costco says comps rose by 4%. that was below estimates, though. and china and u.s. are holding
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an annual talk in beijing. among the headlines, tim geithner repeating calls for a stronger yuan. we'll have a live report from beijing in about 20 minutes. and today's top corporate headline, carlisle raising a less than impressive $671 million. pricing at $22 per share, below its expected range. kayla tausche broke that story yesterday. oracle a bitter lawsuit over a micro processor. a judge refused to resolve the case for either side before trial. bp winning preliminary court approval of a $7.8 billion gulf spill settlement. it would resolve more than 100,000 claims by individuals and businesses. there will be a fairness hearing in november to address objections before the judge grants final approval. nokia holding a shareholder meeting today. the outgoing chairman is promising a range of new products as investors increasingly lose patience with the company's recovery efforts.
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and a story we were buzzing about earlier this week, research in motion is prejudile to continue to offer physical keyboards on future models about tlp had been reports that r.i.m. would ditch the keyboards. joe, back over to you. >> a few earnings reports to watch morning. among the names that we'll watch before the bell, gm, apache, be beam, cigna, cable vision, el paso, sara lee and viacom. here's a recap of after hours movers. the one that got everyone's attention was green mountain. who started that? >> even einhorn started with green mountain. >> rebounded from the first selloff and now it looks scary.
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>> those k cups. >> company's earnings matched estimates. will that's a full screen up. no one knows. but -- >> this squawk ward moment has been brought to you by joe kernen. >> on radio they happened to mention k cup. >> they understand. but the single serve cough tico warned that its growth was beginning to cool off. whole foods beat estimates driven by better than expected same store sales and the upscale grosser is raising its full year earnings forecast. and shares of weight watchers hit will in after hours. first quarter earnings missing the market. the company i guess cut mf-or increased its marketing spending. it did something with its marketing spending. anyway, shares of value which i can also punish. the company results missing estimates and it is issuing a down beat revenue draft for the current quarter.
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let's check on the markets this morning. the futures are probably going to meander around a little until the claims number. adp, wasn't good yesterday, but i was watching "worldwide exchange" in the makeup chair and the expectations have now come down to where anything above 100 is going to be expected for tomorrow's number. we'll see the krams number today. saying that the weather got the expectations too high for the monthly numbers above 200. >> at some point this whole weather thing has to end. >> the weather thing has to end. we front end loaded some of it. >> we're in the nice part of the year. >> but the question is -- >> the weather is crappy the last two weeks. cold and rainy. >> so warm in the winter, that it pulled forward. >> and check out oil. i was reading a piece in the "journal" about natural gas prices soaring 18% to 2 bpt 25.
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just weird when things get down it levels where percentage moves sound big but really aren't. but you can make a story out of it. limiting production at the same time people are starting to switch for homes, a generator that uses natural gas, the grill. i know these things like the grill, your hiba it tchi is not hooked up to -- you don't have a deck? you have to go to a public place to grill. >> i don't have a deck. >> i live in manhattan. >> sorry, we're talking. let's look at the ten year treasury note which is still below 2%. the dollar, you know, do you go to europe with the dollar 1.31? michelle was talking about five euros for a coke. >> haven't done it yet. one part of spain is saying maybe we should charge 5 euros per day if you go to the
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hospital. >> hopefully you live close to the hospital because you have to get there on half a gallon of gas which is what five euros are buy you in europe at this point. but it has migrated for the crappy little cars. >> are you going to blame this on oil tax? >> you know how big the taxes are. $10 a gallon. i know jeeves credit card, you're like the first bush. goes throw and says, woah, look at those scanners. wallet, cash? but did george ever have -- >> can i out somebody, not myself some i was with a baerng t banker the other day and we were going on the subway. and i got my metro card out. i do have a metro card. and he literally said what is that. >> no way. >> i kid you not. >> that's embarrassing. >> was this your liberal limousine bankers or the other kind of banker that the occupy
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wall streeters hate? >> could be both. >> it's going to be a long morning. >> gold 1645. time for the global markets report. julia chatterly is standing by in london this morning. good morning. >> it's a solid performance from european equity markets this morning. indices up between half and 1.5%. the auto sector boosted by germany, we've had stronger than expected results from bmw supported by asian demand. socgen seeing their outperforming up around 3% today on better than expected earnings. but trading pretty light ahead of what was the key event today, at least for this morning, which
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was the spanish debt auction. they sold at the top end of expectations 2.5 billion euros worth of debt. bid to cover also looked good, but yet again like we were saying just two weeks ago and last week, too, they had to pay up to it. three year in particular, we saw a 50% rise in the average yield from the last auction just a few weeks ago. some of the traders actually priced at or slightly above where the secondary market was trading raising all the concerns about the demand from banks. france also sold 7.5 billion worth. but the key focus now is the ecb rate decision and that is around half an hour time. not expecting any rate change, but we're looking at what draghi says is he going to lay the ground work for further easing or will support for the eurozone on the data, he'll be speaking
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at 8:30 eastern time. back to you. >> thank you, julia. appreciate it very much. joe's making shaome jokes on th side of the pond. >> not about -- >> nothing about julia. >> about uk politicians. >> joe mentioned the $120 million auction to the painting. his 1895 painting of a terrified man called the scream sold for $119.9 million at sotheby's. the most ever paid for a work of art at auction. >> here's my question. aim n i'm not a person that can necessarily figure out about something is great like a jackson poll laack or the one g
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that begins with an rflt. but i have seen the masters and i can tell what the -- that those guysrflt. but i have seen the masters and i can tell what the -- that those gu. but i have seen the masters and i can tell what the -- that those guys are really good. the scream painting has gotten to be iconic, but is it great art? >> absolutely. >> because of the feeling, the investigation ral feeling that it gives you. i've wondering whether the campbell's soup cup is great art.you. i've wondering whether the campbell's soup cup is great art. >> i'm more into the campbell's soup. i agree with you, i'm not an art guy. i don't have the eye for it this. i wish i did. but why? why is it -- >> it speaks to all the internal dialogue that many of us suffer. >> when do you feel that the scream feeling? >> about 3:00 in the morning when the alarm goes off. >> whenever i see that painting, i think of mccaulacaulay culkin
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"home alone." >> i think of scream, i think of the killer in those movies that was terrifying with the scream face, which sort of came from him. i think the scream series had something to do with it being $119 million. it's such a celebrity painting that the point. >> one of my favorite sound bites every, i said so when you get these big sales coming up, you're trying to rack the billionaires? and he's like, no, the billionaires come to us. it there isn't one single asset class that can suck up nearly $100 million in under ten feet. you can't buy a house, you can't buy a piece of jewelry, there is nothing. so if you immediate to suck up liquidity, you have to by art. we have to get them in, are they willing to spend 5% of their assets on one painting, work them up, do starter level
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paintings. >> when you get a chance to say sotheby's, you need to embrace it. gr what about christy's? >> can't do the same thing with christy's. it's -- you have to get way up here. you lock the back of your jaws. >> channel your inner jeeves. >> sotheby's. i like it whenever we do a story about sotheby's. >> do you think anyone from sotheby's will come on now? >> will they might. christy's comes on a lot. >> you know what's interesting, when there is a slowdown, you definitely see it. chanos very closely follows the auction market. >> let's get to some other news this morning that's not related
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to art, but i don't know what this could be related to. rupert murdoch is again in the news this morning. a democratic senator has now turned up the political pressure on news corporation, reviving questions with whether a scandal at the uk newspapers could jump to the u.s. senator jay rockefeller of west virginia has written to the uk lead of an inquiry into the con dublg duct of the british press. he wants evidence that troubling and criminal conduct had occurred in the uts or involved u.s. citizens. this is getting political. now -- >> over the years, i've watched a lot of things jay has said and done. and i've never really been able -- i like the name and that he's a rockefeller and he's a democrat. >> uk and the way they do media in general -- >> when did rockefeller decide to go to west virginia and why? >> lower taxes?
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>> right. anyway, coming up, a live report from beijing. geithner and clinton are on a mission there. and then tomorrow, becky will join us there omaha. warren buffett facing shareholders there. and then monday he will join us live for three hours starting at 6:00 eastern. [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees...
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u.s. equity futures have doubled hair ptheir potential g. now indicated up 8 points. cigna reporting quarterly reports at the top of the hour.company earning $1.28. revenue can beat the street. >> now today's national weather forecast. scott williams joins us from the weather channel. scott. >> good morning, guys. of course you're wake up in new york city with clouds, a few wet streets out there. but that rainfall is on its way out. right now at laguardia, mostly cloudy skiesskies. 52 degrees. winds out of the south at about 6 miles per hour. a lot of the showers moving on to the south. so we will see improvement in the weather department as we
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progress throughout the day today. philadelphia, good morning, it is cloud dcloudy, 54 is the cur temperature. showers moving out. and what about conditions toward the gulf coast this morning some around pensacola right now, we're looking at those temperatures right now in the 70s, cloud cover and also showers around. minneapolis 66 degrees. we have good visibility, showers and thunderstorms still in that forecast for you a little later check out new york city's hour by hour forecast for you. we're looking at the clouds, a few morning showers out there, but as we transition into the afternoon time frame, look at the temperatures for you right around 12:00. right around the 58 degree hark. so some improvement over this morning as far as the cloud cover moving out and also those temperatures will moderate a bit. toward the atlanta area, we are also looking at that forecast for you hour by hour. temperatures will be in the mid fifth, by lump time upper 50s by
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noon. chicago, what about an hour by hour, we're looking at low 50s out there early this morning. and then those temperatures will moderate as we go hour by hour. we have that threat for a few scattered showers and some thunderstorms. some of the stores in chicago could be a little strong to severe. minneapolis, cloud cover it for you, as well. we're also looking at that threat for a few scattered shower and storms producing severe weather. your travel forecast, heading home, nashville, tennessee to mobile, alabama, scattered showers and thunderstorms. dallas, texas to oklahoma city, sunshine along interstate 35. in the meantime, chicago, illinois toward madison, wisconsin along interstate 94, your travel plans here, a few strong thunderstorms. some could produce damaging winds and large hail. and around the indianapolis area toward columbus, ohio along interstate 70, we're looking at a next chur of smixture of sun . back to you. the fourth round of the u.s. china strategic and economic
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dialogue being held in beijing today. emily chan joins us there beijing with more. >> thanks a lot, michelle. and of course this morning henks kicked off here in beijing. it's about 6:20 p.m. local time. fourth have a enl tooic and economic dialogue. it this is a forum created to manage bilateral relations and promote communications between the united states and china. something that was created back in 2009 under the bush administration. the next two days will be spent on economic as well as security issues. representing the u.s. delegation of course we have secretary of state hillary clinton as well as treasury secretary timothy geithner. as far as the chinese party is concerned, vice premiere and state counselor, it's believed some 20 departments are taking part in these two days of talks. we had a joint opening session this morning as well as a photo call and then we have the sned economic track opening remarks. later this evening in about one
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hour, we're expecting there to be a meeting with the vice president. going into these two days of talks, analysts saying sentiment was positive, but we did have of course a little bit of a drama dissident chen guangcheng complicating matters because of course he took refuge in the u.s. embassy, but that aside, back to the sned, we did get comments coming out from hillary clinton saying the u.s. is committed to building cooperative partnerships with china. as far as geithner was concerned, he's saying china has continued to move more into more market based exchange rates and both sides have made progress in reducing it external imbalances. and talking about those imbalances, we did get numbers out from the ministry of commerce in china saying that the trade surplus with the united states was due to u.s. export controls. and so, therefore, git they are has pledged action to loosen those export controls before long. sfau as far as the trade surplus, we're expecting the april figure to come if at about $10 billion.
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and that will be up there march's 5.35 birl i don't know. as far as exports and imports, we're expecting those numbers to rise just over slightly on year. but of course china continues to defend its controls on the yuan saying the exchange rate will do little or has done little with the trade wall between u.s. and china. as far as china was concerned, the premiere saying that both sides should make both of the hat form provided by the dialogue to boost cooperation in trade, investment, finance, infrastructure as well as science and technology. so we still have one full day of talks in the sned tomorrow. back to you guys. >> thank you so much. this incredible duality. we know behind will the scenes there is all will drama with the dissident who now says he would like to leave china. unbelievable. >> to me the entire story of
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china is one big duality. >> it is. how do you have capitalism with chinese character sticks -- >> and we have neal furg ferguson would talks about they've vaulted to the top of the world chain except for property rights and personal freedom. and sooner or later, it will come home to roost. even though we don't understand chinese culture like we should and -- >> but there are people who believe that that duality is coming here. >> we're starting to head toward moss personal freedoms, is that what you mean is this. >> the grander sort of economic inequality argument. >> i don't want to go there. >> we're talking about income inequality in china, 30 years ago, 60% of that. lags lived population lived in poverty. that has been reduced to less than 10%. so everybody being core. >> average gdp $10,000.
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so our 99% lives better than their 10%. >> that is true. anyway, we have other news. >> the disparity is with a do you accept, the tradeoff you accept for growth and freedom. >> he i am not disagreeing with you, but that is a conversation that clearly has come here. that's all i was suggesting. bill clinton says politicians need to stop squabbling over austerity measures and calling on them to set as 150id what he says are entrenched views. take a longer term approach to find real solutions. clinton argues in europe that the key to battling the economic malaise is to take the long view, promote growth instead of a current plan to cut spending and raising taxes. >> i don't know what he's saying. sounds like he's saying -- he's giving credence to the anti-austerity crowd. >> sounds like -- and that's the argument that people are making
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here. but we haven't even begun austerity in this country. i don't think we've had a real conversation about austerity. >> we keep talking about slowing the rate of growth and spending of the government than actually slowing down the government. >> we did just have a story about hillary clinton and then went right to bill clinton. the clintons are still with us. >> it's a dynasty. >> don't you need multiple generation for a dynasty? they're more like a pow are couple. the bushes are a dynasty. >> if hillary were to make it into the white house, that would almost be a dynasty. >> that would be the first woman president. >> could you get behind that? >> could i get behind that. >> that's interesting. okay. two california farms are under quarn tee and a calf branch also under investigation. this follows the discovery of the latest u.s. case of mad cow disease, but the government says the actions are standard procedure and there is no threat to the food supply.
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michelle. speaking of food, the u.n. says world food prices easeds last month driven by fall this is grains and sugar. and coming up, karl rove's latest venture and an interesting mix of business and politics. plus we'll head to the trading pit and see what dra today todan has in store. first as we head to break, here's a look at yesterday's winners and losers. is grains and sugar. [ barking ] appears buster's been busy.
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recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards.
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let's do what's best for our students-by investing in our teachers. let's solve this. welcome back to "squawk box." it's 6:30 on the east coast. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. becky will join us from owe that that tomorrow.
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and warren buffett will join us monday morning for three hours. among this morning's headlines, phillip falcone is turning to karl rove for help. he wants republican strategist to figure out how to keep his ailing telecom start up alive. rove has been quietly working with light squared as a counselor for about a year. falcone face as deadline and just days away set by light squared debtors. he has until next monday to revents the company from being forced in to bankruptcy. >> and natural gas trader john arnold is reportedly closing down his flagship centoris fund. will would end an era in which he defined the high risk big reward energy speculate tore. he has been struggling to maintain as gas prices sink to a ten year low.
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>> retiring in his late 30s? >> what would you do if you were going to retire in your late 30s? >> so many times michael jordan retired. you end up doing something. >> i think you do, about but what would you do? >> maybe he thinks $1 billion is enough. he's made enough. >> but the thing is, as we have pointed out many times, it could be $50,000, $100,000, it's not about the money, eats about success, achievement through merit. if you inherit $1 billion, you end up on drugs and in a flop house somewhere normally. it's about doing it, it's about the act itself. don't you think? >> i do. >> and that's why these guys that have all that money, that's the great buddy fox question. how many yachts can you water ski behind. it had nothing to do with the money itself. it had to do with the game. >> it's about the game.
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>> some of them are on their 80s and still on their blackberries doing deals. >> it's not about retirement. >> let's show you the market so is far. futures suggesting that we would have a slightly positive open here. dow higher by 15, s&p by 2, nasdaq by 4. the price of oil is lower down 29 crepts. 104 -- almost $105 per barrel. ten year yield is still below 2%. yield higher. you'll get 80 yen for every dollar. euro will cost you $1.31. and the price of gold at this hour, lower by 8 bucks. >> more gloomy day ta out of europe. joining us, ben liechtenstein
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and david woo shortly. ben, let's say we print 110,000 tomorrow. that would pot be a surprise to the players, would it? >> no, not necessarily.not eg a the players, would it? >> no, not necessarily.pot be a the players, would it? >> no, not necessarily.not be a the players, would it? >> no, not necessarily. look at some of the data this week. encouraging e sch ism, but discurrenting adp. energy levels have really been reflecting that mixed activity. for example yesterday the charge lower -- >> but the dow is at a four year high and we have a terrible -- >> but they look at the russell. it's far from the year high and it's a broader based har kets. the dow is only 30 stocks about. >> we didn't get a selloff on a terrible adp number. >> we actually did have a selloff when we traded below the
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previous day's trading level and then we traded down 1390, the previous trading day was 1391..0 >> what with a cause disappointment tomorrow? >> it's my sperk difference that traders are looking at the market from a more technical perspective rather than a fundamental. as i mentioned, they're just hands in the air uncertain in terms of some of the correlations that they've been seeing from the fundamentals to the technicals. and then specifically some of the core hagss in the markets, that's more important right now than a weekly jobless data number. >> tomorrow is a monthly. and it's the most important number that we'll have will this week. let me ask david woo about this. we saw the 120 and that came out of nowhere to some extent. but now people, have they not recalibrated expectations for tomorrow? would 110 throw the markets for a loop? >> i think 110, 120 is what the
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market is looking for. consensus is still around 150 or something like that in that ballpark. but i think expectations have come down quite a bit on the back of the first quarter gdp mum. so i think anything above 120 you get the market will rally. anything above 120, you'll see the rates market selling off. >> have people decided that the rebound in the employment picture is still on track even with a 120 last month and a 120 will this month? paulson will say this is fairly typical. we always talk about jobless recoveries for the last three or four recessions and it might take longer, but this isn't that bad and that we're now in a point where 120 is not going to throw minute for a loop tomorrow and they're still on track. sxwrt majori >> the majority of our clients have realized there are a lot of
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reasons why you don't want to read into a lot because of the pay back for the warm january and february. the difficulty of doing seasonal adjustment because of the crash in 2008, 2009. so people will sit on the sidelines until the may data. people will withhold judgments. so if tomorrow's number is weak, people will find excuses for it. if it's a strong number, they will say the market has recovered. >> so what do we key off of? how does spain factor into this is this. >> i think the market is still overtly pessimistic about europe in the very short term. at the end of the day, what's different from last year and the year before is that we now have legal framework in europe dealing with the crisis, a lot of money, determination on the part of everybody to though more money at the problem just to
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basically get -- europeans take long summer vacations. i think you have to wait until the new government is over for this crisis to basically get to the next level. from that point of view, i don't think ecb will cut rates. they'll wait until essentially the bank stress tests to come lieu at the end of june. they'll wait for more data. i think the market is short europe. everybody a short euro, everybody is short spain. so you have to ask yourself that the will point for european assets to continue to underperform, you need much worse news than the market is looking it for. >> we kept hearing about caution, caution. who doesn't though about you'ho problems? >> when does it flare up, what's the tipping point? >> for me the tipping point is let's say come august/september
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when it's clear that the honeymoon period it in spain -- sglefrn >> everyone is on vacation then. >> policymakers is on vacation that's when speculators can basically run a muck. but the point is as long as he's talking the language of the germans can understand, i think the europeans will continue to extend their support. it's only when you start to see protests, riots across spain, when clearly the commitment to reform is starting to come undone. >> if sarkozy loses, what happens? >> i think that's also priced in. saw the debate last night. i think it's clear that sarkozy was not able to land a knockout punch last night. it's clear that hollande will win. i think it's not good for the
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french stock market. everybody knows that. but whether it's bad for the euro is a different question. >> i couldn't you had a word. i couldn't tell who was winning. did you try to watch that? >> i saw some clips of it. >> in the end does it really matter for hair economic policy? this guy can say all he want, but once the interest rates start to rise, it's amazing how they find religion. >> hollande is not a radical politician from the left. this guy has been part of the political establishment in perhaps for many, many years. he's an insider, not an outer. j that's t >> that's the amazing part. talking about all this crazy stuff that doesn't work and yet he's been part of the establishment and he might
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actually win. absurd. >> last thoughts, ben? that's why it's hard to talk technical stuff. what is your take now exactly? >> again, joe, obviously i take a much more technical perspective. >> and what can our viewers use? >> i think the market right now is in kind of sideways pattern. it's uncertain amid conflicting indicators fundamental and technical. but if you look at the dollar trading just below that 80 even level, that's tell tale right there. if you look at gold trading mid 1600 level, that's in the middle of a huge balance in with 1900 and 1500. and i try and ask myself which way is the market trying to go and is it doing a good job in doing so. and clearly the equities right now and future stock indices are trying to move hire. and if you look at the just most recent test of the 1350 level and the rejection of that level, i would have to answer that they are doing good job going higher. so again, while we're not on
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near highs in the s&p and s russell, the dow is. until we take out that 1350 level, still in mid recession. >> paulson will say 1500 is still his target. good go as high as 1655 before pulling back. i'll do the math on that to see where that gets us for the year. personal wise. i don't think it gets us quite to -- but that would be -- >> you'd have to hustle to get to 30 at will point. >> what are you talking about? it's may. >> we're at 12% already. >> did you just listen to this man? >> he says everything's baked this to the cake already. >> do you think he's going to get this number? >> he's not an equity guy. >> he's a currency guy. >> we are definitely on our way. we're at 12%. three times 12 is 36% and you compound that it's like 60%. thank you, david. you see what i'm dealing with.
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>> i've said all along i hope you're right. gr. >> only for re-election prospects. >> thank you, ben and david. you don't want -- it just increases wealth disparity if the stock market goes up. it adds to our problem of a fair society. >> if you have comments, questions about anything you see here, shoot us an e-mail. still to come, big banks take their complaints right to the fed, but do new regulations really have an impact on financial stocks? plus the "squawk box" book club hands out another two blue chip book awards. today's authors have written timeless classics that every business leader investor needs to have in their library. at 7:50, we'll get busy with tim farris and the four hour workweek and then one of my favorites of all time at 8:45 a.m., michael lewis, the author of liars, poke, boomerang money ball. he's the man. and we'll have him here.
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top, the wait tomorrow, th over. the april employment report. don't miss it. coverage starts tomorrow at 6:00 a.m. eastern.
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u.s. equity futures at this hour, nice green arrows across the board. dow would open up about 10 points higher. nasdaq also higher. as would the s&p 500. the heads of six large u.s. banks meeting with fed governor daniel tarullo yesterday. they aired their grievances about a host of proposed
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regulations. they used the meet to go press their case that the fedded should ease back on proposed rules that concern the amount of credit exposure banks can have to other large financial companies. new trading restrictions and how much of a state they will have to keep loans that they later package in to securities. that's a big issue and i think you'd want them to -- you want them to own a big piece of this and of course they don't wants a much skin in the game. the kbw bank index, you can see it there, looks like a roller coaster as they're coming back on top of the turn there. joe. >> coming up, a product that andrew says changed his life. >> it did. it did. >> is this underwear? >> underwear, but -- >> under shirts. they make underwear, as well. >> what changed your life was not like boxer/brief type stuff. >> it's an undershirt. >> and it makes you peel skfeel. >> it has revolutionized the
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undershirt market. gary kaminsky -- >> it's a girdle for men. >> it is not a girdle to men. >> that makes sense. in the next hour, don't wait until tomorrow's jobs report for the employment story. we'll have challengers monthly layoffs, first hoe if you went to sleep before midnight, you missed an exciting end to the rangers/capitals game. new york winning in triple overtime. rangers take a 2-1 lead in their eastern conference semifinals series game. four is on saturday in d.c. tomorrow becky is live in omaha. preparing for berkshire hathaway's annual woodstock for capitalists. this weekend, warren buffett faces share holders and then monday he'll face "squawk box" live for three hours starting at 6:00 eastern. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. 
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we're in chairs this morning. we're dressing to a t. tom patterson is the found erp of tommy john which makes t-shirts which aren't supposed to ride up or shrink. these are undershirt. a couple weeks back gary kaminsky was here. i wore these shirts myself. i told gary about it. he said you give me no good investment advice except the
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undershirts. given that he said that we thought we'd have tom on to talk about the undershirt. you have revolutionized undershirts. it sounds like a ridiculous story. >> so soft. why is it so soft? >> these shirts are different. >> tell me that doesn't feel better than a t-shirt. >> i like cotton. ♪ touch of cotton >> doesn't that feel good? >> it feels okay. >> he likes it. >> what was so empty in your life that it caused you to try a new undershirt? >> i wear undershirts on the show -- >> i do, too. >> often times they're bull eke, they sometimes ride up right down here. we're on tv so it doesn't always look so great. >> does it really work as a girdle? >> it says here for the ultimate thin look.
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andrew, did you see that? >> andrew, look at you! oh, go! >> tom, explain what these shirts are. you have revolutionized a product that i didn't think you could revolutionize. >> my frustration is every undershirt i wore, they'd shrink, ride up, have excess fabric gut, ufg. we chose a fab reich that breathes. it's a micromodel stretch. it never loses its shape but gives -- >> is it sin theic? >> spandex is a synthetic. >> doesn't it make you sweat more? >> no. >> it's not like a girdle thing. it not like sucking you in. there are t-shirts that do that. you guys don't do that. >> this is not compression, it's
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not a girdle, it lighter in weight. the big misconception is you have to be fit to wear this. we don't recommend you wear this by itself. >> you used to be in another profession. >> i used to be in medical devices. i decided to research fabric, design a shird that would keep your shirts tucked in, isn't them to friends and family. we since then started launching products for the bottom side as well. >> you had to add to the product mix. i find had hard to believe that you can make boxers that don't yellow. >> buy the black kind. >> black is phasing out white underwear maybe because of that reason. i don't know. >> anyway, congratulations. they are great undershirts. but they are expensive shirts. >> $38 for one of these. >> no! >> can you get the price down?
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that's very expensive. >> still to come this morning -- >> thank you for being here. >> tommy john. general motors is turning in to earnings central. david ammann will make a pit stop here. op here. tt it's guaranteed to grow grass anywhere, even if you miss a day of watering. [ scott ] seed your lawn. seed it!
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. seeking a clear path for the economy. what's gotten citigroup's peter orz ak worried? >> zeroing in on gm. the auto giant get ready to report. we're going to break down the numbers line by line live from detroit. >> earning his stripes. entrepreneur lifestyle guru and
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author tim ferriss heats things up as our blue chip book award continues. the second hour of "squawk" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. i'm michelle caruso-cabrera along with joe kernen and andrew ross sorkin. >> i don't think that 40.75% is right. compared with 2.75% and sold five-year bonds yield -- more executive turnover at electronics chaen best buy. chief marketing officer barry judge has designed. no reason given but his departure was said to be
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amicable. and this might convince aspires artists just keep at it. futures right now are suggesting that we will have a positive open. despite higher yields in spain, we don't see a lot of bad news coming out of there, the s&p would opener higher than 2, the nasdaq by 12. >> joining us for the next two hours, vice chairman of citigroup's global banking. i'm just reading some of the stuff to brush up on the latest. there's dog people and cat people in the world. there's those people who think bernanke has done so much and
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way too much, all the qes as we talk about even more. in your view they underestimated the housing crisis and didn't do enough at the start or to this day they're still not doing enough? >> well, i actually think they've done a lot. the point is they significantlyoned estimated by about 5 percentage points, along with everyone else who are using formal macro economic models because they didn't concentrate -- their mad el didn't take it into account. >> i rather it in real time. >> i don't think anyone knew at that point it was going to ineffect all -- infect all the
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way up to prime mortgages, right? >> if the numbers are high, don't believe macro economic models. >> some people say it's very simple what's happening, we keep interest rates at zero, the banks over time recapitalize but this is the easiest way to recapitalize our banking system, it's halfway through, it will be done in a couple of more years and everything will be okay. is that accurate? >> i think we are significantly through but not all the way through the deleveraging process. if you look at house holes dead in twees as a share of disposable income was 108%, rose to 126% and by the end of last year was down to 110%. we were getting there but we're not through the process yet. >> this this grand debate between stimulus and austerity, where are you? >> we should be doing a lot more
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of both. the right combination is more support for the economy while the unemployment remains -- >> what does more support look like? >> more stimulus being bigger payroll tax holiday. keep it in place as long as the unemployment rate is elevated. don't tie to the calendar year. if unemployment is above 6, 6 1/2%, phase it down, keep a much longer tax holiday in race. >> what does austerity look like? >> act now, a lot of def signatures reduction that takes place later. you want delayed austerity coupled with up front stimulus. >> is unemployment the one to use? it's a lagging indicator of the question kmi. >> what i would like to do is a version of the employment-to-population ratio. can you do it in a variety of different way, but to tie it to a cyclicalnd kateor so you
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doesn't need congress to come back, even if the economy remains weak when it's scheduled to expire. which brings us to the mess that we're going to face at thend of the year. >> well, your point is if romney is elected, nothing will get done because the house and senate will wait until he tax office. it would be a better -- are you saying it would be a better outcome in something was done right in november in the lame duck section? why would it make that much of a difference to wait a couple of months? >> under pretty much any scenario, the probability of a deal being done during a lame duck is pretty low. if magically wins the house, logically they'll say let wait until he's in office. if president obama is reelected, i think it's going to be more
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challenging than people think. >> now that you work on wall street and you're surrounded by people who tell you that romney would be a better candidate. >> you man like the people on this snet. >> there are people on this set who is v said that. what do you do they will? >> actually, it interesting as you think. on my day job i'm very foes on the cleents and -- >> they probably mr. speaker know who you supposed. >> right. >> they're not going to convert you. >> but do you try to do them? >> the conversation doesn't happy. no is the short answer. it doesn't come up. >> what are they missing? >> well, >>look, a lot of this think has to do with your personal views on what drives economic activity and kmk growth and there are different theories of the case there. people have different perspectives. i happen to share the one more
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aligned with the democratic party. you what do you think is going to han to the financial markets? >> chaos. the rates will be be way up -- i think there as going to be a lot of drama, going over the edge, have the tax cuts all expire, have the sequestration come into play, having the debt limit -- >> didn't we do this already? >> that was nothing. that was like child's play because you on have the debt limit, not the 3.5 dgp contraction. >> now all of a sudden it's really a cliff that you're worried about? everybody wants to let the bush tax cuts expire. i guess you're going to tell me it's just the wrong time for them toks pier, right? >> i think when the unemployment rate is very elevated, the worry i would be worried about tax cuts expiring.
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it's not that i expect work ethic to plummet. instead because it takes purchasing power out of the economy. it's more the keynesian thing. >> it bu it is kind of funny, isn't it, that sometimes tax cuts don't do anything and they're not very helpful but the thought of letting them expire -- >> when the economy is weak. this comes back to the jobs versus saw stairity. you don't want a lot of austerity occurring when the economy is very weak. the uk and europe is starting to show that. >> i would do the same thing. kristy romer in a new york city piece -- -- >> i saw that last weekend. >> do not enact moore immediate ifor making the challenge harder. >> but what about all the labor reforms. >> so can you slice and dies the
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deference. >> of course been. >> unfortunately the discussion about europe has come down to raise taxes and cut spending and that's their answer to everything and they refuse to acknowledge the strangele hold that unions have on near live 60% of salaries over there. you would agree dismantling that and allowing more ability to hire and fire would be a good thing. i also think the key thing is not to be immediately raising taxes and cutting spending in the way they are because it creates a downward spiral. >> i'm having a deja vu in washington. >> wow, that's right. >> we agreed on the you a then at this tease. i saw the interplay and i said i've seen this before. >> because you would not normally be on the show with us. you were with us, you were there. >> i was.
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>> a quick break. comments and questions about anything you see here on squawk, including some of the comments around this table right now. shoot us an e-mail. still to come this morning, general motors, well off its targets. and how much would you pay on the right and how much would you pay for the one on the left? we did some digging for you and we have the exclusive numbers next. >> coming up, more from peter orszag. and later, tim think ferriss joins us to earn his blook awar.
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futures suggest the dow would open more than 2.5 points. slightly positive open across the board in terms of percentages. "squawk box" live in omaha tomorrow ahead of this year's annual berkshire hathaway shareholder meeting.
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warren buffett is live for three hours on monday, meaning he is getting super early for you guys. >> that is a huge show. before the break we showed you this and we asked you how much you would pay for each of these, the right or the left. the one on the left is a relative bargain, the scream mask goes for $9.99 for party city.com. >> $9.99? >> what did i just say? >> you know. >> the one on the right, however, completely different story. we turn to bertha coombs who has more on the scream. >> i this h had to ask about t-- movie. >> the one on the right, it was clear this would be quite
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literally a screaming buy. >> $100 million. >> yeah, when this got to that level, auctioneer tobias myers gave them as much time. just shy of 1d 00 million, shattering any record for any piece of art ever and one of those things that people had come to see, even people who normally only go to the postmodern impressionists were here because they wanted to witness this night of history. don maren said this was a great night for art. >> first it is a triumph for the picture. it's a triumph for sotheby as. they put a lot into getting this. it says the art market is
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probably more important to a wider range than it has balanced and refrekts thlects the art ma global opinion. >> we do not know who the successful bidder is. sotheby with this one picture alone, they told more than kristy's had the nice before and the commission on that one was a scho cool $12.9 million. not bad for about 12 minutes of work for that painting. andrew, you're very discrete about these things. are you the one who won? >> it's not me. i was thinking of going out and buying a poster of macauley c l culkin from "home alone."
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>> not to mention the insurance you have to have because the other versions have been stolen. >> you can bly bye a blow-up doll of the scream. >> really? >> you can. >> it's a family program. >> only you would think -- >> exactly. thank you. >> are you talking about an anatomically correct blow-up doll? is this something you're familiar with? >> bertha, thank you. >> it's not you, it's me. >> the guy who i have the sickest vision in my mind right now. >> i'm going to find one on line right now. >> we were talking to peter orszag. >> i'm not getting in the middle of that. >> our guest host -- >> who is now staying till 9. >> are you a big art guy? >> no, no. it was not me. >> it wasn't you?
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>> he's been on a government salary for years. i hope he doesn't buy art. at least not yet. >> give him shares in the company? >> no. >> before we went to break we were talking about the austerity versus stimulus thing. when you talk about back loading austerity, if you will, one of the great worries people have is you say you're going to back load it, everybody agrees to the plan and then when it actually comes due, as we've seen, by the way, with the debt ceiling debate and what ended up happening there, all of a sudden the deal gets recut. >> a lot of things that have been delayed in implementation have taken effect without a hit. social security reform, the changs were back loaded, they tall took effect. 1997 agreements on medicare, a bunch of that was back loaded, most of that took effect. where you get in trouble and where it's easy to waive is if you do what now is digs
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proportionately being done being that you promised a big reduction in outgoing rekregsry numbers and up say congress in 2017 will be bound by this limit that they can easily just wave. that's a different thing than putting a system like medicare or social security on the glood path. >> you're not working for citi. you get puts in front of lots of clients, i assume some corporate, individual investors, big clients. right now in terms of investing, in terms of what's happening, this is stuff we talked about with jim. where are you in terms of the market? when people say how is the economy and where is it going to go over the next 12 month, what do you tell them? >> i think we're, again, better than we were last year, in the sense that we're another jere through the adjustment process. but in terms of --
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>> therefore you tell them to do what? >> not to get too carried away with unusually high growth projections. insteady think we're going to wind up with 2, 2.5% growth for another 12 months. >> what are you hearing? >> after apparently there was a challenge thrown and after further review and looking at the tape and replay -- >> this squawkward moment has been brought to you by andrew ross sorkin. >> that's pause you were campaigning. >> i can challenge things. >> come on, you're talk about blow-up dolls. >> i did not mention blow-up dolls. >> okay, we have a serious conversation out here. i'm trying to understand as an investors what i'm supposed to
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do -- >> i want to know if there's goingon hiccup in europe. i think you're has a three sector problem. the financial sector piece is better in terms of infecting us. they've injected a lot of liquidity and to the degree that people have not really appreciated, we are experiencing a dramatic deglobalization of finance in terms of european banks returning to their own domains and then goebbels banks basically saying each country's subsidiary has to float on its own boat. by the way, it causing problems -- >> isn't it bad for the global economy? >> it's causing problems in particular sector, aircraft lease financing, for example, where one part of the global thank you.
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>> french election -- i think it very like we're going to see drama there assuming -- >> does that mean drama in the market? >> and that then mean religion at 8%, 7%. >> it's going to be an interesting ride in the meanwhile. >> if we have to keep fiscal? should they be tightening up? is that what you would advocate looking for situation. >> well, look, i don't think monetary policy is key constraint. the first best thing if s if we could do more fiscal support. >> peter, thank you for coming on this morning. we reesht unpleasant farmly moments.
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but -- oh, we don't want a young viewer. >> let's move on. >> let's move on. >> up next, earnings j jb motors. time now for today's aflac trivia question: what was world one 1 called before world war ii? the answer when we continue. ♪ i'm taking what they're giving, i'm working for a liviliving ♪ ♪? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!! [ thlurp! ] aflac!
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now the answer to today's aflac trivia question. what was world war i called before world war ii? the answer: the great war. >> aflac! still to come, under the hood at gm. we get quarterly results and hear from the company's cfo. start your engines! we're just getting started right here on "squawk box." [ male announcer ] at scottrade, we believe the more you know, the better you trade.
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welcome back to "squawk box." i'm phil lebeau with breaking
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news. gm's earnings better than expected, 8 cents better than the street was estimated. revenue coming in at $37.8 billion, better than expected. north america incredibly strong. the company earning $1.7 billion last quarter here in the u.s. when you look at europe, it continues to be a problem. a loss of $256 million in the first quarter. by the way, guys, gm's profit margin 5r margin 5.8%. we'll have an interview with dan ammann. we'll talk about the results in just a few minutes. >> we have breaking news on the pace of layoffs. here first with the result, john challenger. john, good to see you. give us the numbers in terms of layoffs that have been announced. >> well weeks saw 40,000 plus job cuts in the month of april.
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that was 7.1% higher than we saw in the month of march and 11% higher than we saw in april a year ago. >> bottom line that for us because we started to get questionable numbers coming out of the other employment data, the adp, we're worried about what going to happen to the employment number on friday. >> looks like the layoffs are going up slightly, not in any kind of major way. it's consistent with this kind of slow growth economies. there may be companies looking forward toward the fiscal cliff at the end of the year, worried about consumer confidence and beginning to make some cuts. >> we're looking at the industries where we saw job cuts. looks like education is at the very top. are we're talking public schools, universities? what does that mean? >> this is primarily public schools. over 9,000 cuts were announced there. certainly not surpriseding with all the fiscal challenges state are having. schools are continuing to have
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to cut back and it's probably a long-term trend that will continue for some time. >> what sector seems to be doing the best in terms of not laying off and hiring. >> health care, technology continue to be strong. we saw interesting news this month out of the automotive sectors with chrysler deciding not to shut down, go threw their normal -- financials, 4,000 job hires in the month of april. we're not going to have more bankers in the world. i know some people won't like that. >>. >> no no, and bankers a aren't such the bad giep as they were for a while the whole credit card issue is causing a lot of companies, banks, to cut back. >> what's the difference between cost cutting reason structuring when it comes to job cuts? it feels like the two of them are very closely linked frequently. >> often they are.
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different ways that companies characterize their cuts. sometimes they go straight to their shareholders, we've got to show you we're cutting our cost. maybe because of a mergering or do a restructure persian gulf. >> but those are the two primary reasons we saw companies doing the zmuts. >> exactly. >> all right. john, good to talk to you. let's talk these numbers with our guest host jim paulsen. you heard earlier when we introped peter orszag. you came in here with the notion that this is pretty typical of a postworld war ii recovery. you didn't see last month's disappointing employment report as a big setback and you're not that worried about tomorrow's, right? you think things are going along pretty well? >> i've been making the point that this is the third recovery
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in a row that's been a slow starter. >> jobless recovery, i remember that. >>. >> but it's years old, going on for years. real gdp for the first 11 quarters in this recovery is up 2.43%. real gdp of the first 11 quarters of of the 19930s economic boom was up 2.5%. >> you're not going back to 80, '82, though, right? >> prior to the middle 80s, recoveries are much much of wind streak. the idea that this recovery is broke is incorrect. and this country is rolling out just as well as the last two. you take net job creation from recovery to date and this is
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right on top at this point. we've had more private jobs created but we've lost more public jobs. >> no summer swoon. >> i don't think so. >> it's nothing like the last two years? >> i don't think so. economic policy, we had over 5% mortgage rate prior to the 2010 and 2011 swoon weerngs now have over four. 1% money growth in 2010, 5% money growth last year, 10% money growth now. we had inflation rising prior to 2010 and 20101. we now having to add all these. >> you also think we don't get qe there 3/and the reason we don't get it is because we don't need it? >> i don't think so. i would hope not. >> i was thinking we're back to that david tipper comment where here said if the economy improves on its own the stock market goes up. if the economy doesn't improve on its own, the fed steps in and himself goes up.
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tomorrow if it was a really bad number, would initially be viewed in the pris many of qe3. >> i think that they could certainly do another qe3. i don't know why they did qe2. we have $1.5 trillion of excess bank reserves that no one is using. why add morgue to that i don't know. we already have zeer over interest rate. i really think, joe, there is still a as soon as, even though we've flowed of a a little bit we've got so many more things working. bank loans have been rising for a fum year after ak no-show in the first two years. we've got the job market showing its greatest advance, over 2 hoon,000 jobs a month. we have housing activity showing
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its latest activity since the crash. we've got auto shale back to 15 million. >> so you would get long then? >> i would. even though we're up 12% for the year? >> i've been on the view that this year was about revaluing earnings. this year we're going from 13, going to 14 and i think we're ultimately going to go to 15. >> it's funny because you mean 1,500 on s&p, too? >> yeah. >> would you buy dividend, big cap, small cap? what would you do? >> i would buy more of the cyclicality of the marketplace. i think people think we're growing at 2.5% or 2.25. i think we're growing more like 3% for the year. >> for the year. i think if people realize that, that upward revision this growth will lead to an upper evaluation
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of the market. i think the emerging world could be a big catalyst this year. with all the ease going on, we could see a reaction sell racial. >> i like the merging. in this country i like the manufacturing stocks, industrials, basics and emerging. i also like the financials because i think confidence is finally starting to get high for the government. you said we could get to 1565. >> on the s&p. >> here's the third catalyst -- >> could we get 30% this year? >> about that. >> why? you're mr. probable. >> i can't get him. >> he can't even get me to 30. >> i do think the conversation changes. when we get to 1,500s thereabouts, we'll be talking about new all-time record highs in the market. >> volume is wa theic.
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will's no retail interest right now. >> that would be the final catalyst. we're up 125% total returns since march 9. >> three straight years of 30%. it happened one other time. >> it's happened before. >> we're talking about making money. why do we got to go? we have maybe another guest host. >> he's sticking around. >> i know. he is the actual guest host. >> so if you missed it, phil lebeau gave us gm's numbers. cfe david ammann joins us after the break. the break.s is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the spef hertz.
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gm just reported and beat the street but europe's still a major concern. phil lebeau joins with us another first on cnbc interview. take it away, phil. >> thank you, michelle. i'm jond by dan ammann. this is a tale of two companies,
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north america, europe and some of the challenges. >> a solid quarter overall, margins up, better cash flow year over year. we're pleased with the the fuel efficient market, we're pleased to be back in the black in south america. we have ongoing challenges in europe. >> in europe you lose a quarter million. i asked you before we came into this interview have you seen the worst in europe? what's your take there? >> if you're talking about the european economy overall, it's too soon to tell how that is going to shake out. the economy is the primary driver of the business. we're working aggressively to get the business where we want it to be. >> you think it's little steps we should be expecting? >> i think you're going to see a series of steps as we move through the year. there are a number of actions
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we've be taken already. both on the cost and revenue side. >> break even on the year? >> not make anything predictions at this point in time. >> let's talk about europe. $1.7 billion. you're able to get a price that is driving this and a 7% profit margin. are we toward the end of of the game in terms that much pricing staying strong? >> pricing is a function of the vehicles we're putting into the market. so the small vehicles are coming in. they're much better than the vehicles that they replaced for us. >> but is the consumer as strong as it was let's say six months ago and they want to continue paying that price? or are you seeing weakness in the consumer? >> i'd say they're willing to pay the price for the right product. if you've got the right product, we're able to price for it.
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>> one p let's talk about 5.8% overall for the company. it's not where you want to be relative to your competitors. hyundai is up there in the 13% range. how long does it take you to get up in that 9, 10% range? >> it's a multi-year effort that we're working through. so we'll make progress a quarter at a time and a year at a time but we're taking a long-term view as to where we want to get to. some of the actions will bring benefits right away, some will take action to come through. >> a little more on cost cutting? >> right now it's all about getting revenue price right and cost right. >> before interest and taxes, earnings come out to $2.2 billion. back to you. >> the european central bank left the keefe interest rate unchanged as expected. now stands at 1%. we're going to show the intra day and euro.
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we're going to show you the european markets. maybe this gives them a little bit of a boost. we'll listen to the news conference if they get on when we come back. euro is at 1.3130. coming up, what can you get down in four hours? apparently everything. >> if you guys had a four-hour work shock, you can get a lot of work done. yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed absorbs and holds water better. it's guaranteed to grow grass anywhere, even if you miss a day of watering. [ scott ] seed your lawn. seed it!
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>> we are proud to be kicking off a new segment this week, the "squawk box" book club, featuring authors and handing them our blue chip book award. authors will be featured on the cnbc.com web site. >> it's now time to present another blue chick bop book awa. it's called "the 4-hour workweek." he followed this up with "the 4-hour body." it's a very good book, joe. and "the 4-hour chef." learning anything and living the good life.
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tame first tim ferriss is here. i go to wore web site every saturday. i bought that phillips blue light but i don't know if it working for me. i want to you know that. we have been featuring the classics all weekend and we are adding this to the library, "the 4-hour workweek." this did become a best seller after nobody wanted this book. if could you do this book all over again, would you do it differently now? >> it's a good question. turns out most of the principles in the book are very, very old, a few thousand years old. pulling from seneca and also things like peter drucker. i wouldn't change the principles. it's really case study with how people have changed their workloads without sacrificing incomes. after 70 plus printings and more
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languages is add in more international case study. >> so what would you do with like the "today" show, which is four hours every single day? >> i think you'd have to calculate things in dog years. >> i mean, they do a three-hour show every day. by 10:00 in the morning they're done. >> go ahead. >> i was just going to say it's a good point. i think that the book is for a very large segment of the population -- >> but not tv anchors. >> not for tv anchors, not for bricklayers. most people who have to work in front of a computer screen or on telephone -- >> oh, you're saying who actually have to work is i think what i difference could be. >> ultimately the objective of the book and really the primary benefit of the portfolio of techniques is maximizing your per-hour output. for many, whether they're venture call tappists, teachers,
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writers, they want to get as much done with each hour they put in as possible. they may still work 50, 40, 80 hours a week if they want to. on the flip side. >> i was watching "a day in the life" and you didn't look like you were working that hard and i wasn't sure if you were using your hours efficiently. >> that was a friday. i reserve friday for in-person meetings typically. ultimately it's very important not to confuse motion with productivity or being busy with production. this that is also a comparison of being effective, doing the right things, versus doing efficient, but they're really well. >> tim, do you have a blackberry
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or anything? i was watching that show and i'm thinking there's not moment in the thing where he's look doing something on it. i don't spend much time with my thumbs. i do have an iphone butch that's also part of my business as an investors and startups like air force base and note and so forth and so on. have i to keep abreast of those different app elements. but i don't have a blackberry. >> let talk about this. this book put new a very interesting position. you are now an investors in things like facebook and twitter and adviser to other companies as well. how did that happen? >> it came about i think like many people in '99, 2 thousand ended up moving out to silicon valley. itself in wb 2001 and two, it was linked in, facebook, all those companies were performed.
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i was able to be successful of the books that people wanted to talk now? >> the book was accidental. i never had any plans on being an author the all and. ultimately it was the notes from four/frief that after my long-term girl friend broke up with me because of what was was in the book, it was because of the pain. >> was that a girl friend or a composite girl friend? >> an avatar? >> did you sort of put them to the you'd have inform. >> this is -- i know that's a little rit -- didn't are you, too many. >> >> they do a tango champion. you did a certain amount of sins
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-- spins. how many did you do? >> i think it was 34, 35. dithat on regis & kelly. >> with a partner? >> yes. >> what does a tango spin look like? >> the male is like the sun and the female resolving around the sun. the female has to do four steps as the male is doing back steps and pivoting while doing a pirouette. you just stood there and said good job? >> the female can look at the fixation point. it's ardor for me to tan maintain my balance. but the woman did have a four of other a week. we got it. >> we're going to have you on
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sem pt. >> no, we'll get a dark-throwing chimp. >> when you come back, i'd love to hear what the next big startup is going to be. congratulations on the blue chip. we'll put the book on oufr self this morning. >> bourbon and skinny gifrl with the ceo of "beam." and nen the author michael lewis.
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tdd# 1-800-345-2550 and get started today. >> america's mortgage enforcer at work. he's making sure a $25 billion settlement goes to struggling homeowners and he's talking to us first. >> the blue chip book award gets a new indubtee. this morning michael lewis joins us to find out which classic gets on the shelf. >> we're going to shake things up. >> why don't you walk me through the board. >> and get the latest breaking data only here. the closely watched weekly jobless claims numbers out in less than 30 minutes. the final hour of "squawk box"
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begins right now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'd joe kernen along with andrew ross sorkin and michelle caruso-cabrera. becky quick is on her way to meet with warren buffett. the berkshire hartaway meeting is going on all weekend long. >> not like this guy who gets to sit on the stage. >> and you be asking questions? >> i'll be asking questions. becky will be asking questions. >> who else will be there? >> three analysts. >> will it just be warren?
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>> it's warren and charlie monger. the board is usually there as well. >> they don't answer questions? >> no, it's just warren and charlie. but they answer questions for five hours. it's bill gates is in the audience -- it unbelievable. >> there's a microphone, we ask a question, the journalist ask a question and this year for the first time analysts will ask a question. it will be an interesting mix of things going on. and there's always crazy people, fun people in the audience. there's always fun people. >> ackman goes? >> ackman has gone. others go. there was a rumor once jay-z was going to go. >> it was a family trip of year. >> your family owned shares -- >> the b shares. >> not the a shares, the b shares. >> i'm trying to pin you down you lig 1%er, silver spooner. >> you can only buy a pair of
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cowboy boolts once. >> you went on a trip with your family. >> news alert just crossing the wire. 1.1% for target versus an estimate of 2.8% gain. come nk lighter than expected. a premarket move lower by more than 3%. macy's missing the mark as did gap sales as well. tluch see ma there you see macy's lower. >> the u.s. government is inking a massive $25 billion mortgage settlement with the nation's financial giants. you saw that earlier this year. now comes the tough part, making sure the banks hold up their end of the deal.
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that's the job of our next guest. keeping them honest, how would they get around it, joe? what would they do that you need to keep an eye on so closely? >> well, i don't think -- good morning, by the way. >> good morning. >> i don't think they're going to try to get around it. i think they're going to try to comply with it. and i'm going to do my best, along with a lot of high quality help, to check their work and be sure they abide by it. by the way, if i can say, joe, the agreement was with 49 state attorneys general of 49 states through there attorneys general and with the united states government. >> okay, good. i understand punitive measures, but it would be nice if the $25 billion would actually towards, i don't know, something that would help the housing industry rebound more quickly. >> well, there are two pieces to the part of the settlement i'm overseeing. one is the consumer relief,
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which you just referred to, and the second is a restructuring of the settlement -- or the servicing processes that the banks use when dealing with distressed borrowers. there are two pieces. the first part, the consumer relief part, is essentially the banks' to do. they have obligations to do principal forgiveness or other kinds of restructuring of loans. and so we will be checking in on that. i'll have a lot of help checking on that. and the second piece, the servicing standards, will take -- will be done over time. they'll implement them over the next, well, 18 months or so -- not 18 months, six months. and when that's -- we will be monitoring that as it goes. so i'm hopeful actually that the servicing reforms will be the long lasting benefit we get from this process. >> let me -- i got a couple of
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sort of politically charged questions with this because it's so politically charged. like so many things in the country, there's a whole contingent of people who think we should have let the market equill ibate immediately. there are others that say we haven't done nearly enough and nobody should have been foreclosed and all the principal should have been forgiven. where are you on that? >> where i am is enforcing the settlement agreement that will test out some forms of mortgage forgiveness to see if it helps the market. i think we're past the idea of letting the -- the problem about the first theory is that the mortgage process, the foreclosure process itself i should say, was so busted it would be hard to let it happen that way. in fact, there are issues about the quality of some the foreclosures that have already been done. >> that's the other this
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evening. people would say and this is -- whether it's true or not but this is what you'll hear on one side of the political spectrum, is that there were robo signings admitted but will no one that wasn't way behind on their mortgages, no one that wasn't already a year and a half in abeyance or whatever was foreclosed upon. so it's almost like a technical fact that, you know, that's what they point to to say that the robo signing shouldn't have even mattered and here's a settlement that's punitive and that puts the banks in a bad light when in fact a lot of the people were not current on their mortgages. >> right. >> all of them. >> all i can say to that, joe, is that the banks have agreed to a fairly extensive and i think helpful settlement that will do a lot of good for the mortgage market and they didn't do that out of the goodness of their hearts, right? >> i don't know. it's tough to fight city hall. do you know of a single case where someone was foreclosed upon where it want a robo signing but it was where the
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person was current and should not -- proceedings should not have been initiated against them? >> i don't. but have i a lot friends -- well, not friends -- well, they are friends. people are talking to me now. i get calls from a lot of people. there are some examples. the more important issue is the false filings or incorrect filings, were violations of law. can you talk about that as a technicality if you want to but it's a question of relationship of capital markets to our government. >> if someone accepted no docs, no income or those type of things? even if it's a technicality you mean it's a false filing? >> i mean that the amounts the banks said they were owed was in many cases not correct. it may not have been a miss by a mile, it may have been a miss by a minute, but the point is that the compliance with law i think is an important thing. and it got the banks in a lot of hot water, not just with the states but withtreasury, hud
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and u.s. justice. anyone who wants to know about the seriousness of what went on ought to read the complaint in the case that's just been settled. it was serious. >> very good. we appreciate you explaining all of that today, joe. thank you. good luck. >> you're welcome. nice to see you. >> let's check out the kbw bank index year to date. as you can see, that was one of paulsen's big positions -- not really. >> would you get into the banks now? >> i would. >> which ones? >> well, i like the large cap. not the mid and small because i think there are still issues there to work out, andrew. but the large i think are pretty clean and the biggest thing that's happening, i think confidence is the most important for the financial industry than any other industry. you just don't loan money to somebody or borrow without it. and the fact that confidence is breaking out is finally i think bringing the financial stocks
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back to life. >> are there any you wouldn't touch? would you touch citi? >> i'm not going to get into individual names? >> oh, come on. >> i certainly would buy the large cap etf. >> there's a technical term for that. >> wuss. >> just don't say you're cautiously optimistic. that's the worst. >> i decided yesterday if i'm ever in that business, you can't go wrong. >> with cautiously optimistic? >> that might be my most hated phrase. >> it is different than optimistically cautious. >> what is optimistically cautious? >> the other half are optimistically cautious. >> coming up, the ecb leaving rates on hold.
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mario draghi will hold a news conference today. what his comments might mean for the global market. and new jobless claims are expected to decline. we'll keep our eyes on that number and gm reporting quarterly results. earnings and revenue beating the street. the company's ceo on last hour. >> revenue up, margins and better cash flow year over year. we're pleased about the fuel efficient vehicles in the marketplace and house of representatives they're doing around the world. >> look at shares of gm as we speak. not so bad for a thursday morning here. coming up, it is 5:00 somewhere and we have the booze indicator. what it tells us about the state of the global economy. i don't know if we're going to be able to make it past the commercial at this rate.
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check out the "squawk box" indicator. we're coming right back and i imagine we'll be feeling pretty good by then.
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welcome back to "squawk box." now we're up 5 points. we have about 15 minutes until the claims number, which we're waiting for. check out the shares of green mountain. the company's earnings were okay, matched estimates last night. but the single-serve coffee company slashed its full-year sales outlook and warned growth was beginning to cool and as a result it's a 40% loser. >> nothing worse than a cool cup of coffee. >> unless you wanted it cool and made it ice coffee. >> that's cold, ice coffee. >> the retailers reporting april comps today. ae aeropostale is raising its guidance. >> intro booze it says.
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>> have you drank any? >> not today. >> not this morning. >> how would you explain how you're acting? >> that's his normal state. that's the whole point. we just learned this. >> it's called wit. >> ooh! >> it's something that you've never apparently had much experience with in 35 years. >> beam reporting better than sp expected earnings. we're joined by the company's ceo live from deerfield, illinois. good morning. >> good morning. >> i imagine you would have some wit for us. let's walk through the earnings. how do you explain what's going on? >> we had a very strong start to the year. there's a number of forces driving our business. the first is bourbon had a very, very good performance, continued the trend from last year, both in its home market in the u.s. and around the world. leani linked to that, a lot of innovation in a favored segment
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in a number of categories. you've got red stag on there, a great addition to the category. and emerging markets continue to do very well. double-digit growth across emerging markets. >> give me the europe story. >> europe is a very interesting story. you really have to look from west to east. markets like spain, an important market for us, is a difficult market. we're growing share and i think we're really punching above our weight there. as you go further east, however, you get to germany. we've seen very good growth there and central eastern europe all the way through to russia is seeing tremendous growth. we're up double digits and we're very pleased with those results. >> i was curious with how your sales line up with the economy. was the 2008 prices good for you guys? >> are you countercyclical? people are depressed, they lidrk
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more? >> we would say we're recession resilient, not recession proof. the market maintained its consumption levels and we're back to growth this year, globally at about the 3% level. >> i get flavored vodka, because vodka has no flavor, flavored gin. how do you flavor a bourbon? >> i think people have been flavoring their bourbons. think about manhattans. >> see, i drink it straight is the problem. >> that really explains something. wow. >> we're seeing an overall trend, certainly in spirits. i'll give you an example.
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female account for a third of the market. they're coming in and enjoying red star as part of their repertoire. >> what's the fastest growing drink? >> would i look at the red bourbons. red stag, we just released a couple of new flavors there. we have a great innovation called devils cut. you may have seen that on the airwaves recently. >> what's going on with skinny girl, bethany frankel? >> it's been a great year. she's involved with the brand market with us. we started out with margarita and exit anded white cranberry cosmo and just in the past couple of week extended the brand's reach further and entered the flavored vodka market and wine, which are both big categories of female users. >> can you set al skinny girl debate for me.
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some people think you paid betha any any over $100 million. can you tell us the number? >> i can't tell you the exact number we paid but i think we got a very good share from that deal. i think it's worked out well for all of us. >> i want to talk about the women drinking bourbon. women were always white lookor drinkers, vodka, gin. this would be a big deal, women? >> flavors is ways we're bringing them in. i think females and males are enjoying the bourbon story. its roots of you a then at this
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tea -- authenticity. >> it's so american. that's what i love about bourbon. >> i must be a girl. i don't like bourbon. >> do you like gin? >> because of my nose? >> are you drinking skinny girl? >> no, no. i should. but what is it -- >> no, wait, gin makes you a mean drunk. >> what about making their mark? is it smooth or somebody? >> two generations ago, they wanted to create a fuller, rounder flavor, and maker's mark is mate with winter wheat and it's a rather sweeter flavor. it's doing really well. >> it is. it's got a weird lid on it. >> it's got a special lid. you tried that? you don't drink colored -- >> i do occasionally.
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>> we have to go. how much do you recommend we drink? on a daily basis, on a weekly basis? i'm curious. >> you should drink responsiblely, enjoy these great products. i hope you get a chance to sample some of the products we put on the set. >> do you drink every day? >> i don't drink every day. but i enjoy our product and there's nothing better after work on a friday night than a jim beam. >> thank you. i'd like to blame your products for what's going on on the set but it probably will only get worse from here. >> what's going on? it's fun. i'm having fun. >> that's the point. the show hasn't been off the rails yet. >> have you been with hoda and kathy? they drink every day on the set. >> they don't drink on c-span, though. that's not fun. >> maybe they do. >> coming up, key data ahead. tomorrow's employment report.
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weekly jobless claims and quarterly productivity just ahead. we'll bring the numbers and the instant market reaction. >> tomorrow becky is live in omaha preparing for berkshire hathaway's woodstock for capi l capitalis capitalists. monday, warren buffett will face "squawk box," live for three hours starting at 6:00 eastern. to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz.
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well come back to "squawk box." viacom reporting higher quarterly profits. sara lee, the company is in the process of splitting in two. >> and "the scream" set a record last night selling for $119.9 million at sotheby's. that's the most ever paid for a work of art at an auction. wow! joe. >> coming up, we're just minutes away from the weekly jobless claims and first quarter productivity data. take a look at the dow futures ahead of the numbers, which have been trying to get back to sort
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of the flat line. 14 points.
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welcome back to "squawk
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box." we are minutes away from jobless claims. right now the dow would open higher by almost 7 points, s&p by nearly 1, nasdaq by a little more than 1. we'll get a really good sense when the number comes in in about five seconds. rick, the numbers? >> first quarter preliminary, nonforeign productivity down 0. 5. claims dropped from a revised 392 down to 365. so that indeed is a much bigger number, down 27,000 than we were expecting. and continuing claims at 3.276 is a bit less than we were expecting as well. so a drop in claims from a revised 392 down to 365 will probably be perceived as the
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good news of the day, but it's going to definitely pale to move the markets in front of the anxiety of tomorrow's release of the bls labor report, the unemployment report, in lieu of the weaker adp yesterday. >> that makes sense. we're seeing a positive boost in major averages with the futures but we're worried about tomorrow. >> product did not go down as much as expected and labor costs did not rise as expected. >> i like the claims number because it's the number one of the economists i follow suggested it would fall if the prior numbers were a spike due to seasonality that had to do with the early easter. so joe was asking me this has nothing to do with the april numbers. i don't think that's necessarily true. >> it would help the may numbers. >> it also tells us maybe the last two weeks which have caused
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people to downgrade their outlook for tomorrow, may have been distorted by the seasonality issue. maybe we captured it march and then we're back to trend, which i always thought was 150, 175, i think these 200 numbers all along. i didn't think 100 of the number was warm weather. this tells us, michelle, that we're back. >> is this number better than expected but to joe's point, this is not in tomorrow's number -- >> not typically speaking. it could be a little bit. let's talk about productivity numbers, which are interesting. we have that long-term chart in the back i'd love to put up right now, which shows the cyclicality of productivity relative to recessions. it shochs you get this big spike after recessions and now you get a decline. why do you get decline in
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product? as recoveries mature, you get more small business hiring. small businesses are not as productive as large businesses. it's a reason why businesses are large because of productivity. i guess we don't have that chart. it would be like this right after the recovery and then come down. so, jim, we may be in this period here where we have more small business -- >> mr. their it is. >> it looks messy unless you look at the shaded areas. and look right after the shaded areas, those are the recessions and they tend to smipike up. you do more with less and then you bring people on. >> productivity stayed high and when productivity died, the job market came to life. it's just that it's taking longer before productivity dies because ceos -- ceos go as long as they physically can and run up to the laws of natures and can't squeeze any more out and
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they're almost forced into the job market. i would look at the decline in activity as good for the job market. >> but we have no idea about tomorrow. >> we have less of an idea than i feel like we should. >> i like adp but i'm always ready for it to be dead wrong because of the three or four times when it was -- so it's like i've been burned in the past. >> ups wrote apes are particularly squirrely with adp, the last two years, an average miss of 144,000. unclear why. the last two aprils have been bad. >> based on adp. >> if you made a list, isms are good, regional manufacturer have been okay. claims have been bad. but now maybe that claims number may move a little more neutral if the consensus starts to believe the spikes we had have been because of seasonality.
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>> and the stock market's been good without really counting on -- >> then why do you think i got this. i have no idea. >> that's a leadingnd kateor. >> of what? qe? >> i think rates aren't going to go up immediately, therefore -- >> beat 11 times earnings. >> it's called the temper phenomenon. >> i argued that earlier. one way or another it's still in force. if rates don't immediately go to 4%, you should buy some of these dividend stocks. >> i think there's a growing sense of this thing sustaining. there's more parts than ever before that are giving a sense. i think you said this earlier that this spring is -- you don't have the same set of head winds. >> go ahead, jim. >> to underline that point joe just made, the utility etf over the last three weeks has outperformed banks and
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financials. to me that means people are optimistic but not that optimistic. it's mostly trying to run away from a treasury that gives us nothing and find something that's perceived as safety that gives officer little return. you look at the s&p yesterday and the numbers, it's great and i'm encouraged, too. we've had a number of soft and disappointing data. can you count on two fingers the insignificant good numbers. that's great. but we're going into tomorrow and it nol knot big enough to convince me yet in number is going to be blockbuster. how, if a month goes by, we're either going to get some better dietia or the fed going to subtlely remind us-the-have a back stop on this whole thing. >> 170 is the consensus. what number makes me p you feel good about the jokt and what number makes you feel bad? >> the fact we're already trying to figure utility ubs and figure
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out all the bad things would be perceived as a good number tomorrow. but below 140 i think we'll be disappointed. >> rick, can you answer that question? what's your sense of where the market is relative to the number? >> i think anything less than -- anything 250,000 or higher will be a good number. everything else will be averaged done to about 150. but they will grouse about whether, well, it's still pretty good but it's not going to have a huge impact on the market. i think anything 120 or less will bring in the fruit cake crowd looking for more qe to save the world. >> thanks for joining us. >> coming up, his book "liars poker," one of the defining cultures of wall street, we've got him here, author michael lewis is going to join us next to receive his blue chip book award.
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>> federal authorities right now are announcing the biggest bet yet on health care fraud. reported just last money in our documentary. >> sam zahn.com is telling us they are in the process of fulling products cited by the fda that contain dmaa. >> why would herbal life pay con convicted felon? here what's they told me minutes ago, "we settled with him to provide -- avoid pro tracted litigation."
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the dow would open higher bip 20 points in wake of the weekly jobless numbers which were better than expected. the nasdaq higher by 5. this is ecb president mario draghi reading from his notes. he's in barcelona. they do two off site as year. they're announcing this rate decision from barcelona. they kept interest rates unchanged. this is the news conference. the euro has moved off its lows because draghi said he thinks the consumer index in europe will state above 2% in 2012. coming up, michael lewis joins us live. we've all agreed he's one of our favorite authors. "liars poker" is just such a
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classic. we're going to head down to the new york stock exchange next.
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we're proud to unveil the "squawk box" book club this week, an exclusive group of books that drive the conversation in the business world. we've been kicking off the club this week with some of the big classics that belong in any business library. coming up tomorrow we have "accidental billionaires" on the list. now it's time to present another blue chip book award written by my favorite, michael lewis. he's a contributor to "vanity fair." he's woken up very early to join us from berkeley, california this morning. welcome, michael. >> an honor to be here i think. >> you know it's an honor to be here. we'll be sending you an award
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maybe by mail or by satellite if we could. we have "liars poker" here. it's a classic we're adding to the library this morning. the culture that you lived in and wrote about here, do you believe it's different today? >> oh, yeah. the culture -- you know, i've had to think about this a bit because i'm writing the screen play for "liars poker." you realize the culture i was righting about was a culture in transition. there was this old war street where a bond trader was a guy who, you know, had a high school diploma from someplace in new jersey and whose name was vinny, tommy or donny and he had hair coming out of the top of his shirt. i mean, wall street was -- it was even then, even though derivatives were happening and
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the securities were becoming more complicated, it was a much less intellectual place. and it was not just presumed you needed a degree from a fancy school to be at the center of it. so that was changing as i wrote "liars poker." now the change is complete. the other thing is the businesses were partnerships, in the process of becoming corporations, but there was still this atmosphere of partnership, of ownership by the employees, which vanished. and they became corporations. when they became corporations, they became much more inskrutable, much more opaque. >> you have written you would like to break up what you call the too big to fail bank, the wells farg owes, jpmorgan, bank of america, citigroups. if you were going to do it, how would you do it? >> an updated version of glass-steagall, i think.
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if i were god, i thought of this at the time i walked out of wall street in 1988. firms should not be in the business of advising customers or clients to invest in securities at the same time that they have positions in the securities. so i would actually go further than the volcker rule. i don't think we needink firmst are both market makers and advisers. i think can you have, if you want to be a hedge fund, be a hedge evened afund and if you we charles schwab, be charles schwab. there's a notion it would have a horrible effect on liquidity, which would have a horrible effect on the economy. i just don't buy that. i think liquidity is not an issue. i'd break it up right along those lines. can you take positions in securities or you can be an adviser. >> before you came on i was having a conversation with steve liesman, who has a question for
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you about the big short, which is does it take a personality disorder or did it take a personality disorder to ultimately figure out that the financial crisis was upon us? when you think about the characters in "the big short." >> they were all misfits you said. >> not all of them but many of them were misfits. i think it helped. i'd put it this way -- it helped to be an outsider and to be outside the mainstream one way or another. and one way to be an outsider was to be a misfit. i think that's the connection between the unusual personality and the ability to see what was going on. >> michael, when i spend time in washington, one of the theses, the premise that people say to me about "the big short" is they say you read that book and you think anybody could have figured out the financial crisis was coming. is that the message that you were trying to send? >> no. the message was more -- no, because i think it was actually
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a couple things going on here. one is it was very hard to figure out. i mean, the people who figured it out were very clever to figure it out. >> or else we'd all be in additl an element of serendipity in their lives. you could have figured it out and figured it out too soon and been unable to sit with these positions for years and years it took for you to be right. there was some luck involved as well. i think it was much more complicated than anybody could figure out. but however, there was a message and that is smart people inside the industry should have figured it out. so there was not -- there was in the air in late 2007, early 2008 when these losses get announced at the big banks. in the air was the idea that nobody should be blameded for this because nobody saw it coming. it was unforeseeable. and i think the stories in "the
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big short" show you it's not true. >> but people like jamie dimon, and even goldman sachs were less exposed than the rest. they got burned worst than the morons who didn't figure it out, p.r.-wise. it looks like they knew what was happening and they capitalized on it when in fact it was a societal housing boom phenomenon almost. and a couple of them did -- you read jamie's letter that year about it. they saw it coming, he minimized the risk, took a lot of it off. but that didn't help in the p.r. after the crisis. >> one is it's hard to say that goldman got burned worse than lehman. you're still better off being -- >> i didn't say that. but they were smarter as a result they didn't end up like lehman. >> here's this big question still on everybody's monds, resolved in the minds of some but not even in my own. that is when you look at the players who were at the center of the crisis, the people who
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were packaging the subprime mortgage loans into exotic securities that nobody understands, it enabled the crisis. in some cases, at the same time, betting against the very securities that they had created. one asks of these people as the main characters in "the big short" did, are they crooks or were they fools? did they know? >> if they had banks in europe begging for more product and they gave it to them at the same time they had a john paulson saying, i'll take the other side of this, the banks are saying who's this mooch that's taking the other side -- in hindsight, you see that he was right. the whole narrative is changed in hindsight. >> well, except that the narrative is even more complicated than that because it isn't just john paulson shorting the security, it's also goldman sachs. and it really is a great question whether we want
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investment banks to be creating securities to bet against them. >> michael, one of the questions i get all the time, and you probably do as well, is anybody ever going to go to jail, should they go to jail? you did a lot of research for your book. a lot of authors have done books on the financial crisis. have you ever find anything that you would suggest constituted real fraud? >> i didn't think -- at in point did i say, aha, this is going to send someone to jail. but i'm not an expert on securities law. i don't know how you get someone in jail other than insider trading. this is amazing to me. we've come through a period where the real problems had nothing to do with insider trading. to the extent we're putting people in jail, it's by finding people who have traded on insider information. so there are two things going on -- the putting people in jail operation and there's the real stuff.
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and the two don't have very much to do with each other. >> your general idea about having no either advising or actually having a trading book separating those two, that's the only thing that would have caused a goldman not to do that. my point is that you didn't have to be sinister and conspiratorial as goldman. once you had the advising business and the trading business together, you could have different -- that wouldn't necessarily be criminal activity to on your trading side say, i'm going to lower risk and on your satisfying clients side to say, i'm going to give them product that allows them to short the market, do you know what i mean? it's not a sinister -- what kind of squid? it's not a vampire squid move to lessen your exposure at the same time you're giving client that is want to take some stupid position, giving them the ability to do it. so you need to separate everything out to make sure it never happens again. >> that's why i like the clean
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solution. whenever i hear the argument, you can't make these changes on wall street because you do this horrible damage to liquidity, i always feel like -- >> but even a bank that gives a bridge loan is long that loan for a little while. there's so many gray areas where it makes it hard to apply in practice. >> yeah. but to get back to andrew's question about, did i ever think anybody was going to go to jail? the answer was no. seemed like the real scandal was -- all this happened and it was probably legal. >> what's your favorite book of all the books you've written? >> that's like asking me what my favorite child is. you won't believe me. but it's not answerable. >> does it always bother you that we come back to "liar's poker."
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>> what about what made you the most money? which one? >> i don't even know the answer to that. four of them in roughly the same ballpark. >> what ballpark would that be? >> one you can't hit the ball out of. >> are you still fighting with the electronic book -- i interviewed you about "the blind side" and you were not letting the book go out an kindle, et cetera -- >> that had nothing to do with me. the publisher decides that. i think they've sorted all that out. i think everything's available as an e-book right away. >> i'll turn the question around on books. what one, two or three great narratives do you love? what's on your shelf that you'd put on the list here? >> you know, you put me in a
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difficult place because -- i don't know about you. my reading just generally is so driven by whatever it is i'm working on at the time. and that's what fills my head. but if i had to -- the great -- can i resort to fiction as well as nonfiction. >> oh, yeah. >> all right. on my list of favorite books, "confederacy of dunces," tom wolf's "the right stuff" i think is one of the great nonfiction narratives ever written about the space program. what i also keep nearby and sort of gives me strength from time to time are orwell's essays. it's storytelling but in the forms of essay. there are lots of different ways to tell a story. and orwell shows you you don't
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really need a character. you can get away with an idea. >> michael, final question. when "liar's poker" is finally turned into a movie, who do you want to play you? >> back in the day, i wanted john cusack. and i think we would have had him. but that was back in the day. he's now too long in the tooth. we need someone who's so young i don't even know who he is. i asked my 12-year-old. and she says zac efron. so i say zac efron. >> congratulations on the book award. we're going to put this book on our squawk book club shelf. >> what's the cash value of this award? >> check your amazon ranking later today. thanks again, michael. >> pleasure to be here. >> appreciate it very, very much. draghi saying revolutionary things. better to cut taxes --
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>> they've learned their lesson. >> our guest host all morning has been john paulson. >> if only it were john paulson. >> jim paulson. >> hank paulsen. >> i thought you were pat paulson. >> amazing how you steered the economy through the crisis, mr. paulson. >> you caught that one right. >> you've given us the bullish case. what's the one thing that you do worry about? >> i think if we -- the one thing i worry about longer term is inflation. i'd like to see the fed -- i think inflation is our biggest risk down the road. if we keep inflation relatively contained over the next few years, we're en route to a long-term recovery. if we get inflation get out of control, we're going to

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